Security Trusteeship is a contractual arrangement amongst Borrower, Lenders and Security Trustee materialized by executing a document called Security Trustee Agreement (STA) wherein the Borrower, settles a trust with the Security Trustee. Trust will hold Secured Properties (any kind of movables, immovables, pledge of shares, rights, etc.) and the Security Trustee will act as a Trustee to such Trust.
Nature of work
Advantages to Lenders:
- Vetting of documents before execution.
- Vetting of title search reports as a double check.
- Obtaining all corporate resolutions before execution.
- Ensure obtaining of permissions from Statutory / Regulatory / Existing Lenders / Lessor’s prior to creation of security.
- Compliance with registration of charges as specified under Companies Act,2013.
- Compliance with CERSAI rules.
- Safe custody of the documents in a professional environment, easily retrievable whenever required.
- Avoiding frequent transfer of title deeds from one Lender to another in case of down-selling.
- Hold pledge / NDU in our favour as per SAST guidelines for individual /several Lenders; thereby shares are encumbered only to one party. Act as per Lender/s instructions for release of security. Banks are not allowed to hold more than 30% equity stake in any company. However, we can hold 30% equity stake on their behalf. Appropriate disclosures in respect of listed shares are done in stock exchanges to effect the correct pledge position.
- Verify the letters from Lenders prior to modification/ satisfaction of loan.
- Execute re-conveyance deeds on satisfaction.
- Furnish confirmation letter on request from Lenders for Audit purposes.
- Undertake enforcement on the directions of Lenders.
- Mitigation of operational risk and release of resources for core business activities
Advantages to Borrowers:
- Single point of contact in consortium funding or multiple banking structures.
- Single charge created in favour of Trustee for the benefit of various Lenders. This helps in better stamp duty cost management.
- Facilitates Borrower at the time of modification/s and satisfaction of Charge.
- A well-equipped team of experts comprising of Chartered Accountants, Lawyers, Company Secretaries and others possessing rich experience in Banking and Debt Markets, making us the best in the business.
- Timely drafting, vetting and execution of documents.
- Safe custody of title deeds.
- Expeditious implementation of modifications, enforcement directions.
- Structuring transactions as per sanction terms of Lender.
- Vetting of transaction documents.
- Conceptualizing, customizing and structuring of the security documents to consolidate documentation ensuring compliance with all the terms and conditions of the loan agreements of all lenders.
- Liaison with lenders and the Legal Counsel to expediate documentation.
- Create / hold security in favour of the Security Trustee on behalf of the lenders.
- Perfection of Security Interest created under
– Companies Act, 2013 – Registration of Charges
– CERSAI rules.
- Safe custody of original title / transaction documents.
- Monitor the Asset Coverage.
- Maintain Records and submit various reports to the Lenders.
- Re-convey mortgaged properties on repayment.
- Monitor insurance policies.
- Security enforcement in case of default.
– Issue of Notice to Borrower
– Completion of Curation Period
– Obtaining requisite Approvals
– Completion of Court Procedure
– Obtaining Decree